So, you’re thinking about starting a rental business? If so, this guide is for you. However, we should point out that it’s tricky when writing a guide like this to fully anticipate the range of different people who are likely to read it. Are we talking to experienced entrepreneurs who have already created a successful business, or are we trying to help people who are looking to take the leap to start their own business finally?
As Rentrax provides rental management software for a huge range of tour operators and activity providers, big and small, we want this guide to work for first-time business owners. If you’d like more specific information about how rental management software can work for your business model, please get in touch or request a free demo from our trained Rentrax experts.
What Exactly is a Business Model?
Put as simply as possible, a business model plans out how a business can make money. A good model generates a lot of revenue for the business, and it is stable and reliable over time. This is what we’d like to discuss today, covering many of the basic topics that a business model ought to contain.
Defining Your Rental Products
The first and most important thing to consider is the exact nature of your product offering. This, of course, connects with your target customers, but we’ll talk about that later on. Defining your rental products will define your business. Some rental business models may appear not to offer much variety as there is only one standard kind of product.
However, there is always variety in terms of quality and cost. Are you renting out high-end bikes worth thousands of dollars? Or are you renting out cheap, affordable bikes? Are you renting out budget camping equipment, or are you renting out extravagant glamping equipment? Defining your rental products is the first part of the process, and to do it, you will need to consider your target audience.
Who is Your Target Audience?
You could have the most attractive website or shop in the world, but if there isn’t a pre-existing demographic that will be interested in renting your products, then your rental business just can’t work. We know this is stating the obvious, but you’d be surprised how many people create a business without first researching who exactly their target audience is.
However, what is more, common is that people who have been working in a particular rental niche for years decide to branch off to start their own business instead. These people usually have a great instinctive understanding of their industry that just needs a little more guidance when considering an accurate target demographic. Putting more work into fully researching your target audience will inform so many other parts of your business model.
To continue with the bike rental example used above, your target audience will define your products as there’s no point in spending thousands on expensive bikes if your audience is mostly holidaymakers looking for a relaxed way to get around town. Similarly, suppose your target audience is comprised mostly of avid cyclists. In that case, there is little need to offer basic bikes as they will always choose the lighter, faster, more-expensive options instead.
Defining your audience will help you avoid investing in a stock that isn’t likely to generate more revenue than the initial cost of investment. It will also help direct your marketing and advertising efforts.
Creating a Good Website for your Rental Business
Even once you’ve defined your product offering and worked out exactly who your target market is, you then have to factor in how you are going to reach this target audience.
Even if your business plan mainly relies on footfall as passers-by notice your store, you still need to put work into your website. Why? Because your website can do so much work for you in the long run — especially if you work in the tourism sector. This is because many people prefer to plan their trips down to the fine details. So they will rent any equipment they need in advance, and from the company with the best website that was easy for them to find.
This means that a fair amount of work needs to go into your website, making it a nice place for potential customers to look for what they want. Consider the user journey. This is a person’s experience from when they first click on your site from a search engine or social media platform to when they decide to make a purchase. Is a customer likely to immediately click through to a product, or is your rental niche one where people like to browse all of the offers and products before booking? If it’s the latter, your website needs to have enough content to engage with visitors, keep their attention, and meet their needs. Anticipate any anxieties or specific needs customers might have and ensure that your website makes it easy for users to find all of this information. As far as getting people to your website is concerned, you will need to consider SEO and PPC…
Factoring SEO and PPC into your Business Plan
Once you have a wonderful website that meets your customers’ needs, they have to be able to find and choose your website over your competitors. This is where SEO and PPC come in. Search engine optimization (or SEO for short) is the process of making sure search engines rank your website above your competitors when customers search for your products. There are various search engines, but as Google owns a considerable majority of the market, it’s the best one to focus on.
There are far too many things to discuss SEO here if we want to do the topic justice, so we highly recommend reading this SEO basics guide. Putting it very simply, however, SEO is about making sure Google understands that your website is of a higher quality than your competitors’ websites by ensuring it loads up quickly and that it meets users’ needs by having clearly defined topics for each page and plenty of appropriate language within a particular niche. Put even more simply: Google can tell when a website is easy to navigate and when it contains the content it ought to. This is good news for anyone happy to put in the work required to make their website better.
Pay-per-click advertising is usually just shortened to PPC, and Google is, once again, the best platform to focus on. With PPC, you can pay to have your website featured above others on Google’s search engine results page or the Google Display Network. This allows you to instantly get your website in front of people. It comes at a cost, but it’s usually a cost worth paying. PPC is especially useful at the beginning, as your SEO efforts will not bear fruit for many months. PPC is also great for time-sensitive deals and promotions that you want to get out there as soon as possible.
Of course, there is so much more we could cover about creating a business model for a rental business. We haven’t even touched on the best ways to manage overheads, hire staff, talent retention, or encourage return custom. It’s just not possible to cover everything in one concise guide. We hope, however, that we’ve given you one or two pieces of advice you didn’t have before and that you’re even more inspired than ever to start your rental business. Rental businesses can be incredibly lucrative, so we hope we’ve helped several readers to expand and define their business models.